House approves a little more money, Senate readies its budget

Texas House budget-writers voted Monday to free up an additional $3 billion for key state services through such moves as speeding up tax collections, delaying payments and suspending the back-to-school sales tax holiday.

The bills next go to the full House, which Appropriations Committee Chairman Jim Pitts, R-Waxahachie, predicted could be willing to add $4 billion to $5 billion to a bare-bones spending plan it passed earlier this month.

“I think that we can come up with that number, and I think we can still pass the bill. It’s non-tax. It’s not additional fees than what was already assumed in the introduced bill,” he said.

The proposed two-year $164.5 billion House budget would cut 12.3 percent, or $23 billion, from current state and federal spending.

It would leave school districts short nearly $8 billion of money they would get under current funding formulas; cut Medicaid reimbursement rates so much that nursing home closures are threatened; and slash college student financial aid. Extra funds could be used to soften those cuts.

It should be noted that the bulk of what the House actually did was vote to delay making payments to school districts from August to September, which pushes them into the next biennium. That “saved” $1.8 billion, and while that means it’s $1.8 billion more that can be spent this biennium, it has to be made up somewhere. If we’re lucky, revenue projections will be adjusted upward and that money can be paid back before the next Lege meets. If not, that’ll be another $1.8 billion they find themselves in the hole. This is also why school districts maintain reserves, since they know damn well that the Lege is going to do stuff like this to them.

It remains the case that the Senate is planning to spend more than the House is. The Trib documents some of the Finance Committee’s work.

The proposals from Sen. Robert Duncan, R-Lubbock, total $4.8 billion and include $2 billion in deferred payments, which help balance the budget by moving costs from the end of fiscal 2013 into the beginning of 2014. The state still has to make the payments, but not as part of the new budget. Another $1.4 billion comes from accelerated tax collections, in which the state moves the receipt of some of its taxes — on motor fuels, alcoholic beverages, corporate franchise and sales — from a later budget into an earlier one. Both maneuvers allow the state to pick which payments and which receipts will count for and against the budget they’re writing. Another $593 million comes from unspecified measures that, he said, would not require any changes in law.

The remaining $800 million comes from property sales, fee increases (on custom brokers stamps, process server certificates, a tax on small cigars labeled as a fee), changes in unclaimed property programs, and other measures.

Duncan said that all but a handful of the ideas are already in various bills being considered by the Legislature. He didn’t say whether any of the money on his list was already counted in either the House or Senate budget, or both.

The matter of moving more funds from the Permanent School Fund to the Available School Fund came up as well, though if the divided vote in favor of using it is any indication, it won’t have enough support to make into a ballot referendum. I note also that Land Commissioner Jerry Patterson, who vocally opposes using additional funds from the PSF, advocated using more of the Rainy Day Fund instead. Good for him.

Robert Miller puts the differences between the House and Senate budgets in context.

The House has passed a biennium budget spending $77.6 billion in General Revenue. House Appropriations Chairman Jim Pitts has said that he believes he sees another $4.3 to $4.5 billion in non-tax revenue the House would spend. […] Assume the House budget ultimately increases by $4.5 billion to $82.1 billion. The question is what number will it take to make a deal with the Senate in the Regular Session?

Senate Finance is scheduled to vote out its version of the budget on Thursday and take it to the Senate floor next week. I don’t know the amount of the budget, but I believe that it will be in the $85 to $87 billion range. The real gap between the Senate and House when the budget gets to conference during the first week of May is likely to be $3 to $5 billion. At this point, it is anybody’s guess whether that gap can be bridged by May 30.

All of this is without taking into account the possibility of expanded gambling, for which Texas Association of Business President and CEO Bill Hammond advocated in the Trib on Monday. That appears to be a non-starter in the Senate, but if the House passes a joint resolution, who knows? There’s still a lot that can happen. Abby Rapoport and EoW have more.

UPDATE: Per the comment left by Land Commissioner Patterson, I have clarified the post to more accurately convey his intent. My apologies for the confusion, which came directly from my own confusion about what exactly was on the table.

One Comment

Its a confusing subject but as a point of nomenclature clarification, I don’t oppose the use of the ASF (available school fund) but I do oppose a raid on the PSF (permanent school fund) by the legislature when we have the money in the rainy day fund. We last raided the corpus of the PSF in 1861 to finance Texas troops in the War Between the States. As a result of that mistake the 1876 constitution protected the PSF in the constitution so the legislature couldn’t do what some are proposing to do this session. Its called the PERMANENT School Fund for a reason.
Jerry Patterson